Paxton girding for indictment

A Collin County grand jury is expected to weigh evidence brought by two temporary district attorneys assigned to the case. Paxton’s advisers are furiously preparing for a criminal indictment.

The looming showdown has the camps bickering. Anthony Holm, a spokesman for Paxton, contends the AG should not face criminal prosecution.

“As we’ve said for 14 months now, there was no criminal action because there was no crime,” Holm said. “This was solely a civil event with a $1,000 civil penalty.”

Holm took aim at the special prosecutors assigned to the case, calling Houston lawyers Kent Schaffer and Brian Wice lawyers “whose careers are built on defending the sort of child molesters and Mexican drug cartel leaders that Attorney General Paxton was elected to prosecute.”

Holm also accused a local lawyer who provided information about Paxton to a previous grand jury of having a vendetta.

“The Collin County situation is a drastic departure from objectivity, legal precedent or common sense, and it’s time for people to understand a respected public official is the target of a political vendetta,” Holm said. “This witch hunt must end.”

In a written statement, Schaffer and Wice fired back, saying their investigation was “neither a political vendetta nor a witch hunt.”

“The PR shell game Mr. Paxton’s hired gun employs once again seeks to change the conversation from his client’s conduct to personal attacks on us,” they wrote. “He knows full well that we were appointed by a Republican judge in one of the most conservative counties in Texas to conduct a full, fair and impartial investigation, and that is exactly what we intend to do.”

As the story notes, Paxton admitted to breaking the law to avoid a campaign issue. In his mind, that means the matter was settled, even though it had not yet come to the attention of any prosecutor. Now as we know a complaint has been filed and a special prosecutor appointed with a grand jury waiting in the wings, but Team Paxton wants everyone to believe that it’s all ancient history. It doesn’t work like that, I’m afraid. At least, not for normal people.

But prosecutors now say that at the least, there’s evidence that Paxton violated securities law by not registering with the securities board, a third-degree felony. And Schaffer has said he’ll ask for a first-degree felony indictment, though he won’t elaborate on the charge.

The prosecutors could submit evidence of the securities law violation that Paxton admitted to as a slam dunk case. But at least one legal expert says few people are criminally prosecuted for such offenses.

The state securities board did not refer the case for criminal prosecution.

“It’s technically a violation, but you don’t often see that type of violation charged criminally,” said Dallas lawyer Jeff Ansley, a former Assistant U.S. Attorney for the Northern District of Texas and a former Enforcement Attorney for the U.S. Securities and Exchange Commission. “That’s very rare.”

So the key question remains: What’s the evidence of a first-degree felony?

I assure you, we are all on pins and needles waiting to find out. One hopes that these two career defense attorneys will not pursue excessive charges on flimsy evidence – you know, the sort of thing they are critical of other prosecutors for – so we’ll see what goods they have.

That Paxton is in legal trouble can be attributed in part to the efforts of a watchdog group, and the determination of a local lawyer.

The public integrity unit within the Travis County district attorney’s office said it lacked jurisdiction and forwarded information to Dallas and Collin counties for lack of jurisdiction. Dallas County District Attorney Susan Hawk didn’t touch the case either, saying she was not aware of any alleged crimes being committed in the county.

That left Collin County, where Paxton’s friend and business partner, Greg Willis, is district attorney.

After receiving a complaint from Texans for Public Justice, Willis stepped aside and said that “appropriate investigation agencies, including the Texas Rangers,” should handle the allegations against Paxton.

“As soon as we saw what he signed with the State Securities Board, it was obvious that he was admitting to felony conduct,” said Craig McDonald, executive director for Texans for Public Justice. “If Greg Willis hadn’t stepped aside, this thing would have died.”

Meanwhile, Dallas lawyer and blogger Ty Clevenger took the extraordinary step of sending information about Paxton to members of a Collin County grand jury, including three from the same church. He said he also dropped off information to a grand jury member’s home. He got their names from Collin County officials by asking; in Dallas, Hawk declined to release the grand jury’s names.

The grand jury that will hear the Paxton evidence from the special prosecutors is not the same as the one Clevenger sought out. One should always be a little wary of crusaders, no matter how enticing their claims are, but again, one hopes that the evidence will back up whatever comes out. There’s been a lot of trash talk from Team Paxton, which is either bravado or whistling past the graveyard. That grand jury is now in, and it’s put up or shut up time. The Observer suggests what may be coming.

William Mapp, the disgraced founder of Servergy, Inc., was identified at the courthouse by WFAA reporter Tanya Eiserer. Servergy, based in McKinney, claimed to produce energy-efficient servers for corporate clients. The company made extraordinary claims about its core product, the Cleantech-1000, claiming it consumed “80% less power, cooling, and space in comparison to other servers currently available.” But there was a problem: The federal Securities and Exchange Commission (SEC) alleges that Servergy’s claims about its product were false. And the company, the SEC says, produced fraudulent pre-orders from tech companies like Amazon and Freescale to sell itself to investors.

Servergy raised some $26 million from selling stock between 2009 and 2013, as detailed by information released by the SEC. And it profited from grants from the McKinney Economic Development Corporation (MEDC), a local fund that reinvests money collected by local sales taxes. Servergy continued to receive money from MEDC even after a formal SEC investigation began in 2013. Servergy is also connected to a wide variety of other improprieties and shady activities.

Paxton was a prominent Servergy shareholder, owning at least 10,000 shares. But while other investors simply lost their shirts, Paxton’s role in the Servergy case has generated lingering interest from authorities. In 2014, Paxton’s name was included in a list of search terms used by the SEC to subpoena the company, along with several other prominent figures in McKinney. Mapp’s presence at the courthouse today suggests that Servergy’s case is connected to evidence special prosecutors are presenting against Paxton.

That would be a significant escalation in the case against the state’s AG. A large part of the public defense laid out by Paxton’s spokesman Anthony Holm revolves around the assertion that Paxton’s original violation of securities law, regarding his legal clients, was a simple mistake and civil matter that he corrected when it was brought to his attention. The Servergy episode is a whole different kettle of fish, and while it remains to be seen what the prosecutors have against Paxton in connection to this particular episode, it should be a source of significant concern in the AG’s office.

See here for the background. All I can say is “oh please, oh please, oh please”. We’ll see what happens.